World Bank yet to release fund for Swachh Bharat

MUMBAI: The World Bank has not released any tranche of a billion dollar 2015 loan to Prime Minister Narendra Modi’s ambitious Swachh Bharat Mission-Grameen (SBM-G) to address India’s poor sanitation practise in rural areas as the government has fallen short on its commitments.

The billion dollar loan by the international financial organisation was to be distributed in tranches for the next five years to make Indian states free of open defecation (OD), but it was predicated to independent verification of ground results of the project at various phases.

The first tranche of disbursement to the tune of $147 million in return for survey results was to be in July 2016 followed by $229 million in July 2017. India missed the first deadline and is likely to miss the second one too, a Bank official, who did not wish to be identified because of sensitivity of the issue, said.

The task of independent verification survey on the reduction of OD has held up the disbursement of funds worth $376 million, the total of the two tranches till July this year. If this was not all, India is paying the "commitment fee" of 0.5% for this loan it is yet to use, which works out to $1.87 million or Rs 12.75 crore.

World Bank confirmed this development to ET. The loan sanctioned in 2015 is the WB’s biggest lending in social sector, besides being one of the flagship projects of the Narendra Modi government.

The programme is also different from past initiatives on sanitation as it revolves around behavioural change and not on construction of toilets.

The Indian government agreed to the two main preconditions for the release later tranche of funds that it show reduction in the prevalence of OD and sustain the results in villages through a third party independent verification. “It is a pity that the government is paying commitment charge without disbursement of the loan. The commitment fee will come down once the loan has been disbursed,” this official said.

ET has learnt the ministry of water supply and sanitation is far away from releasing the results of independent survey as it is still in the process of hiring a consultant.

“As far as the World Bank project is concerned, the same is to provide incentive to states on the basis of independently verified outcomes through a third party survey. The process of hiring such an agency through a transparent bidding is in final stages and the agency should be awarded contract within a month or so. Thereafter, the process of survey will take around 20 weeks,” said Nipun Vinayak, Director, Swachh Bharat Mission-Gramin.

“The independent survey exercise is going to be an elaborate evaluation exercise that will look at actual outcomes, including usage of toilets, and not just outputs of toilet construction.

Preparatory work in finalising the outcome indicators, sampling design and questionnaire is being deliberated upon by an Expert Working Group comprising independent experts,” Vinayak added.

The ministry also said the commitment fee for this project may be the same as applicable to other World Bank projects, adding this project has been one of the fastest negotiated projects of this scale and is well on track.

In an official response to ET, World Bank said it will release funds as soon as results from independent verification agency are received.

“We are encouraged that the Ministry of Drinking Water & Sanitation is at an advanced stage of contracting the Independent Verification Agency (IVA) and look forward to its analyses. Once the results from the IVA have been received, the World Bank will move speedily to release the first tranche of loan proceeds. The agreement between the Government of India and the World Bank for the US$ 1.5 billion support was signed on March 30 2016, from which date regular Bank fees apply,” said a World Bank spokesperson in an email response to ET.

The total budgetary support towards Swachh Bharat goal is to the tune of Rs 1,34,000 crore of which World Bank has put in Rs 9000 crore to states based on their performance towards meeting the goals of SBA.

Officials working on SBA said three states that were lagging behind in their progress are Jharkhand, Andhra Pradesh and Gujarat. The states faring well are West Bengal, some parts of Rajasthan, Himachal Pradesh and Sikkim.

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